(Research of Short-Run Price Performance of Initial Public Offering Shares between 2013-2018 in Borsa Istanbul)

Abstract

Purpose – The objective of this study is to examine the notion of underpricing for stocks offered in initial public offerings in order to enlarge the equity base and provide an important financing opportunity for joint stock corporations, after the regulations made by the Capital Markets Board of Turkey (SPK) in 2013. Design/methodology/approach – In this study, the end-of-period and beginning prices of the stocks offered in initial public offerings were analysed to demonstrade performance analysis and compared with other studies in the literature. The calculation of the price performances of stocks does not consider macro factors affecting the market. While measuring the price performances, BIST 100 index data were used by taking initial raw returns and initial abnormal returns into consideration. Findings – After the initial public offering regulations made by the Capital Markets Board of Turkey in 2013, the price performances of the stocks of the first 50 companies that were offered to the public in Borsa İstanbul A.Ş. (BIST) in 2013-2018 are examined based on the price performances in their first day, in the first 30 days according to years, the market in which they are traded in and the BIST 100 index. It has been observed that the obtained findings differ from other studies conducted in other developed, emerging markets and the previous years’ dataset. Discussion – The stock price that a company determines when offering its shares to the public in primary markets, depends on the state of the economy, the company’s position in the sector and the interest of the investors in the capital markets of that period. In this context, the size of the company in the sector, its position in the capital market and its weight in the index affect the offering price and the price performance of the first 30 days,and these effects can be investigated.